31% 'facing retirement struggle'

10 September 2009 03:34pm

Nearly one in three people could face financial difficulties during retirement, the City watchdog has warned.

The Financial Services Authority said research suggested giving up work led to increased financial problems for 31% of people.

It has launched a new pension calculator to help people work out how much they are likely to have to live on during retirement.

The tool, set up with the Association of British Insurers (ABI), is available on the FSA's Moneymadeclear website.

It enables people with a pension fund from a previous employer, people currently paying into a pension scheme and people who do not currently have any pension provision to calculate their potential retirement income based on the regular payments they plan to make.

Users can also see how their future income would be affected by retiring early or increasing their contributions.

The FSA said planning for financial security during retirement was particularly important in the current economic climate, as increasing numbers of people are facing difficult financial situations.

Chris Pond, FSA director of financial capability, said: "For many people, pensions are not something they want to think about until retirement is imminent and by then they may find their pension falls far short of the lifestyle they had hoped for.

"So it's important to do as much as possible to make the most of your money by considering all the choices available.

"The pension calculator can help you identify the implications of your pension choices and impact on later income to determine if you are on the right track."

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